Atreyu (Noah Hathaway) learns from the Southern Oracle that the Empress needed a new name, but no one from Fantasia could give her it. He had to search for an Earth child, beyond Fantasia's boundaries, and that child could give the Empress a new name and save everyone.

Atreyu encounters the Gmork (voiced by Alan Oppenheimer), the servant of the Nothing, who informs him that Fantasia is the realm of human fantasy, pieced together by the hopes and dreams of mankind, and therefore had no boundaries. The Nothing that was sweeping the land is what happens when people lose their hopes and forget their dreams. The Gmork said he was sent to kill Atreyu, the only one capable of stopping the Nothing, but lost him in the Swamps of Sadness. Atreyu makes it known to him that he was the one he sought, but when the Gmork lunges for him, Atreyu stabs him with a piece of sharp rock and kills him. Atreyu and Falkor (also voiced by Alan Oppenheimer) barely manage to escape before the last of Fantasia is destroyed by the Nothing.

Atreyu and Falkor find out the Ivory Tower was still standing, and Atreyu enters the throne room and speaks with the Childlike Empress (Tami Stronach), saying that he failed to save Fantasia. She reveals to Atreyu that he didn't, and that he had come into contact with a human child, Bastian (Barret Oliver), the very person reading the story. Bastian was the one who could save Fantasia from the Nothing. As the Ivory Tower is being destroyed, and the Childlike Empress' pleas to Bastian are ringing out, Bastian agrees to save them and screams "Moonchild" out the school attic window, the new name he has chosen for the Empress. His timing was good enough to save one grain of sand from the Nothing.

The Empress and Bastian talk, and Bastian learns that he can restore Fantasia to its former glory simply through making wishes, and the more he made, the more beautiful Fantasia would be. Bastian goes about doing that, eventually doing them while riding on the back of Falkor, and with Falkor?s help he also gets back at the bullies that had been tormenting him earlier in the movie.

The narrator (again, also Alan Oppenheimer) says that Bastian made many other wishes and had many other amazing adventures before returning to the ordinary world, but that's another story.